Still, Farber keeps his main focus on Raskob’s business practices, documenting how he arranged bailouts for GM (the company has a history of that sort of thing), invented the consumer credit industry (GMAC was his brainchild), designed the first executive stock option plan, and was the first to advocate wide-scale employee stock ownership. In early 1929, Raskob also proposed what might have become a national social security system invested entirely in the stock market (but his timing was embarrassingly bad).
Never able to sit still for the quotidian details of management, Raskob preferred to pull strings behind the scenes. He plumped for the appointment of the more temperamentally suited Alfred Sloan to succeed Pierre du Pont at GM’s helm when, for the asking, he could have had the top job himself. In Sloan’s classic My Years with General Motors (Doubleday, 1964), he credits Raskob for introducing the system of financial controls that made it possible for GM to become the world’s largest corporation, invidiously contrasting Raskob to Henry Ford, who was dismissed by Sloan as a genius mechanic who couldn’t manage a giant company. Unlike Ford’s company, Sloan sniffed, “General Motors is in the business of making money, not cars.”
The Car Guy
What led Sloan to depict Raskob as the Great Anti-Ford was the organizational pandemonium created in 1927 when Ford shut down production of the Model T and retooled his factories to assemble the Model A, an event chronicled in Vincent Curcio’s Henry Ford. That totally unplanned, disruptive, and mind-bogglingly expensive transition was prolonged thanks to Ford’s second-guessing and micromanaging of his engineering staff. The retooling took some two years to complete. In comparison, in 1929, GM achieved full production of a new Chevy model in six months.
The debacle was, however, in keeping with Ford’s personal motto: “We must go ahead without the facts. We will learn as we go along.” As good as his word, Ford (1863–1947) seemed to thrive on disorder, creating chaos whenever and wherever discipline reared its ugly head. Ford so abhorred record keeping that, on abolishing the company’s accounting department, he told employees to keep cash in a barrel and withdraw whatever amounts were necessary to pay bills. (He kept a million dollars in cash in his office safe.)
Yet Ford created the world’s most efficient industrial organization, one in which wasteful motion, effort, and activity were eliminated in order to produce a Model T that eventually sold for as little as $260, down from $800 in its first year of production. Between 1907 and 1922, Ford increased annual manufacturing capacity from 8,200 to 2 million cars: What originally had taken skilled craftsmen a week to build by hand was turned out in a matter of hours by assembly-line workers. Ford pioneered the efficient use of raw materials, waste elimination, and recycling. The Model A was produced at the world’s largest factory site in a fully integrated facility that was the industrial wonder of the world, envied even by Stalin and Hitler.
Curcio, also author of Chrysler: The Life and Times of an Automotive Genius (Oxford University Press, 2000), draws particular attention to Ford’s numerous contradictions and paradoxes. Ford was visionary, innovative, inspiring, expansive, bold, rational, generous, wise, honest, and a pacifist. He was at the same time shortsighted, backward, rigid, querulous, malignant, irrational, paranoid, contentious, dissembling, and belligerent. Ford and his immediate family owned 100 percent of their company, a degree of corporate control never enjoyed by the likes of Rockefeller and Carnegie, yet he cultivated an image of himself as Everyman. “When a reporter asked him how it felt to be the world’s first billionaire,” Curcio writes, “he squirmed in his seat and replied, ‘Oh, shit!’”